Snowflake reports widening losses but raises full-year guidance

Snowflake shares fell 8% in extended trading on Wednesday after the data-analytics software company reported fiscal first-quarter results that exceeded analysts’ estimates.

Here’s how the company did:

• Revenue: $228.9 million, vs. $212.9 million as expected by analysts, according to Refinitiv.

Revenue grew 110% year over year in the quarter, which ended on April 30, according to a statement. In the previous quarter revenue increased by 117%.

With respect to guidance, Snowflake said in the fiscal second quarter it expects to generate $235 million to $240 million in product revenue, which represents the vast majority of total revenue. At the middle of the range that would represent 171% growth. The projection came in above the FactSet consensus estimate of $235.4 million.

For the full 2022 fiscal year Snowflake called for $1.020 billion to $1.035 billion in product revenue, which at the middle of the range implies 86% growth and is more than the $1.02 billion FactSet consensus.

Excluding the after-hours move, Snowflake shares are down about 17% year to date, while the S&P 500 index is up almost 12% over the same period.

Earlier this month Goldman Sachs analysts upgraded their rating on Snowflake stock to buy from the equivalent of hold.

“With the stock ~50% off its highs from December 2020 relative to a 1% decline for our broader software coverage and +4% for the Nasdaq over the same time period, we believe investor expectations have become more balanced and see a path towards outperformance, as we believe the durability of growth is not fully reflected in the company’s current valuation,” the analysts wrote. They said that investors could rotate back into growth opportunities, and that Snowflake could introduce long-term growth and margin guidance at its Summit conference in June that could lift the stock.

Executives will discuss the results with analysts on a conference call starting at 5 p.m. Eastern time.

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